Q4 2025 Goodfood Market Corp Earnings Call

Ladies and gentlemen, and welcome to the good food Q4, and fiscal 2025 earnings call and webcast.

Operator: Ladies and gentlemen, welcome to the Goodfood Q4 and fiscal 2025 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. As a courtesy to others, we ask that each participant limit themselves to 1 question and 1 follow-up. Instructions will be provided at that time for you to queue up for questions. Please note that questions will be taken from financial analysts only. If anyone has any difficulties hearing the conference, please press star 0 for the operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, 27 November at 8:00 AM Eastern time.

Operator: Ladies and gentlemen, welcome to the Goodfood Q4 and fiscal 2025 earnings call and webcast. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. As a courtesy to others, we ask that each participant limit themselves to one question and one follow-up. Instructions will be provided at that time for you to queue up for questions. Please note that questions will be taken for financial analysts only. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, 27 November 2025, at 8:00AM Eastern Time.

At this time all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session.

As a courtesy to others, we ask that each participant limit themselves to one question and one follow up.

Instructions will be provided at that time for you to queue up for a question.

Please note that questions will be taken for financial analysts only if anyone has any difficulties hearing the conference. These fresh star followed by zero for the operator assistance at any time.

I would like to remind everyone that this conference call is being recorded today November 27 at <unk> am eastern time.

Furthermore, I would like to remind you that today's presentation may contain forward looking statements about a good footprint and future plans expectations and intentions results levels of activity performance goals or achievements or other future events or developments.

Operator: Furthermore, I would like to remind you that today's presentation may contain forward-looking statements about Goodfood's current and future plans, expectations and intentions, results, level of activity, performance, goals or achievements, or other future events or developments. As such, please take a moment to read the disclaimer on forward-looking statements on slide 2 of the presentation. Please be aware that during the call, presenters will refer to certain metrics and non-IFRS measures. Where possible, these measures are identified and reconciled to the most comparable IFRS measures in our MD&A. Finally, let me remind you that all figures expressed on today's call are in Canadian dollars unless otherwise stated. I would now like to turn the meeting over to your host for today's call, Mr. Neil Cuggy, President and CEO. Mr. Cuggy, you may proceed.

Operator: Furthermore, I would like to remind you that today's presentation may contain forward-looking statements about Goodfood's current and future plans, expectations, and intentions, results, level of activity, performance, goals or achievements, or other future events or developments. As such, please take a moment to read the disclaimer and forward-looking statements on slide two of the presentation. Please be aware that during the call, presenters will refer to certain metrics and non-IFRS measures. Where possible, these measures are identified and reconciled to the most comparable IFRS measures in our MD&A. Finally, let me remind you that all figures expressed on today's call are in CAD unless otherwise stated. I would now like to turn the meeting over to your host for today's call, Mr. Neil Cuggy, President and COO. Mr. Cuggy, you may proceed.

Such these take a moment to read the disclaimer on forward looking statements on slide two of the presentation.

These new weird during the call presenters, who will refer to certain metrics and non <unk> measures.

Where possible. This measures are identified and reconciled to the most comparable <unk> measures in our MD&A.

Finally, let me remind you that all figures expressed on today's call are in Canadian dollars unless otherwise stated.

I would now like to turn the meeting over to your host for today's call Mr. Neil <unk>, President and C. O O. Mr. Kogi you May proceed.

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Neil Cuggy: Thank you.

Neil Cuggy: Thank you. Bonjour tout le monde. Bienvenue à l'appel conférence de marché Goodfood pour présenter nos résultats financiers du quatrième trimestre qui se clôt ce 6 septembre. Good morning, everyone. Welcome to our Goodfood earnings call, in which we will present our results for the fourth quarter ended 6 September. Roslane Aouameur, our Chief Financial Officer, is with me today. You can find our press release, presentation, and other filings on our website and SEDAR+, and all figures on this call are in CAD unless otherwise noted. Let's begin with slide three. Fiscal 2025 was a challenging year for us and the overall industry. Yet, we continued to demonstrate resilience and delivered positive adjusted EBITDA for the full year, and now 11 consecutive quarters, along with positive adjusted free cash flow.

Neil Cuggy: Bonjour, tout le monde. Bienvenue à l'appel conférence de Marché Goodfood pour présenter nos résultats financiers du Q4 qui se clôt 6 September.

Don.

Everyone welcome to our good food earnings call and which we will present our results for the fourth quarter ended September six.

Neil Cuggy: Good morning, everyone. Welcome to our Goodfood Earnings Call, in which we will present our results for Q4 ended 6 September. Roslane Aouameur, our Chief Financial Officer, is with me today. You can find our press release presentation and other filings on our website and SEDAR+. All figures on this call are in CAD, unless otherwise noted. Let's begin with slide 3. Fiscal 2025 was a challenging year for us and the overall industry. We continued to demonstrate resilience and delivered positive Adjusted EBITDA for the full year and now 11 consecutive quarters, along with positive adjusted free cash flow. For fiscal 2025, Adjusted EBITDA was CAD 6 million, representing a 5% margin compared to CAD 9 million or a 6% margin the previous year.

Omar <unk>, our Chief Financial Officer is with me today.

You can find our press release presentation and other filings on our website on SEDAR books and all figures on this call are in Canadian dollars unless otherwise noted, let's begin with slide three.

Fiscal 2025 was a challenging year for us and the overall industry. Yet we continued to demonstrate resilience and delivered positive adjusted EBITDA for the full year and now 11 consecutive quarters, along with positive adjusted free cash flow.

For fiscal 2025, adjusted EBITDA was $6 million, representing a 5% margin compared to $9 million.

Neil Cuggy: For fiscal 2025, adjusted EBITDA was CAD 6 million, representing a 5% margin compared to CAD 9 million or a 6% margin the previous year. While the adjusted EBITDA is lower year over year, in the tough environment faced this year, it underscores the flexibility and resilience of our cost structure, and the disciplined execution our teams demonstrated. In fiscal 2025, we prioritized investments that strengthen the overall business and our customers' experience. Beyond the traditional meal kit, we introduced new features to help customers manage their deliveries better and customize their orders more easily, and also introduced new products like our heat and meat trays in Quebec. These customer-driven innovations have helped drive record basket sizes, as more members are choosing to build out their orders with a wider variety of meals and grocery add-ons. Our investments in fiscal 2025 also went beyond our platform.

Or a 6% margin the previous year.

While the adjusted EBITDA is lower year over year in the <unk>.

Environment faced this year it underscores the flexibility and resilience of our cost structure and the disciplined execution of our teams demonstrated.

Neil Cuggy: While the Adjusted EBITDA is lower year over year, in the tough environment faced this year, it underscores the flexibility and resilience of our cost structure and the disciplined execution of our teams demonstrated. In fiscal 2025, we prioritize investments that strengthen the overall business and our customers' experience. Beyond the traditional meal kit, we introduced the new features to help customers manage their deliveries better and customize their orders more easily, and also introduced new products like our Heat & Eat trays in Quebec. These customer-driven innovations have helped drive record basket sizes as more members are choosing to build out their orders with a wider variety of meals and grocery add-ons. Our investments in fiscal 2025 also went beyond our platform. Our acquisition of Genuine Tea is proving to be both growth and margin accretive.

In fiscal 2025, we prioritize investments that strengthen the overall business and our customers experience.

Beyond the traditional meal kit.

We introduced the new features to help customers manage their deliveries better and customize their orders more easily.

And also introduce new products like our sheet many trades in Quebec.

These customer driven innovations have helped drive record basket sizes.

As more members are excusing to build out their orders with a wider variety of meal and grocery items.

Our investments in fiscal 2025 also went beyond our platform.

Our acquisition of genuine piece is proving to be both growth and margin accretive.

Neil Cuggy: Our acquisition of Genuine Tea is proving to be both growth and margin accretive. The brand is growing sales at over 30% annually, while delivering consistent and healthy EBITDA. Genuine Tea's growth, supported by strong secular tailwinds, has helped offset meal kit top-line weakness. Beyond financial performance, it has provided the blueprint for our M&A strategy, acquiring growing, cash flow-generating businesses with strong leadership that could benefit from our platform, marketing, human resources, finance, and logistics networks. While we continue to remain prudent on capital allocation, given our limitations, we are looking to accelerate our M&A strategy. With those highlights in mind, I will now turn it over to Ross for a closer look at the financials.

The brand is growing sales at over 30% annually, while delivering consistent and healthy EBITDA.

Neil Cuggy: The brand is growing sales at over 30% annually while delivering consistent and healthy EBITDA. Genuine Tea's growth, supported by strong secular tailwinds, has helped offset meal kit top-line weakness. Beyond financial performance, it has provided a blueprint for our M&A strategy, acquiring growing cash flow generating businesses with strong leadership that could benefit from our platform and marketing, human resources, finance, and logistics networks. While we continue to remain prudent on capital allocation given our limitations, we are looking to accelerate our M&A strategy. With those highlights in mind, I will now turn it over to Roslane for a closer look at the financials.

Genuine Ts growth supported by strong secular tailwind, that's helped offset meal kit topline weakness.

Beyond financial performance.

He has provided the blueprint for our M&A strategy.

Acquiring growing cash flow generating businesses with strong leadership that could benefit from our platform and marketing.

<unk> resources finance and logistics networks.

While we continue to remain prudent on capital allocation, giving our limitations, we are looking to accelerate our M&A strategy.

With those highlights in mind I will now turn it over to Ross for a closer look at the financials.

Thank you, let's move to slide Fortunately ketchup top line metrics.

Roslane Aouameur: Thank you, Neil. Let's move to slide four to discuss our top-line metrics. Net sales for the fourth quarter were CAD 25 million, down CAD 9 million year over year. The year-over-year decline reflects a lower active customer base, 66,000 this quarter versus 101,000 last year. The lower active customers, which are customers who placed an order during the quarter, are in part driven by lower order rates, but also result of reduced marketing and incentive-led promotions. Overall, the headwinds in meal kit demand persisted in this quarter and in the last three quarters of fiscal 2025. With that said, net sales per active customer did increase 12% year over year to CAD 379 this quarter, driven by higher basket sizes and lower incentives.

Roslane Aouameur: Thanks, Neil. Let's move to slide 4 to discuss our top-line metrics. Net sales for the Q4 were CAD 25 million, down CAD 9 million year over year. The year over year decline reflects a lower active customer base, 66,000 this quarter versus 101,000 last year. The lower active customers, which are customers who place an order during the quarter, are in part driven by lower order rates, but also a result of reduced marketing and incentive-led promotions. Overall, the headwinds in meal kit demand persisted in this quarter and in the last 3 quarters of fiscal 2025. With that said, net sales per active customer did increase 12% year over year to CAD 379 this quarter, driven by higher basket sizes and lower incentives.

Sales for the fourth quarter were $25 million.

The year over year.

The year over year decline reflects a lower active customer base 66000, this quarter versus 101000 last year.

So lower active customers, which our customers will place an order during the quarter in part driven by lower order rates, but also a result of reduced marketing and incentive led promotions.

Overall, the headwinds and meal kit demand persistence in this quarter and in the last two quarters of fiscal 2025.

With that said net sales breakfast customer did increased 12% year over year to $379 this quarter driven.

Driven by higher basket sizes and lower incentives.

This was also the result of our expanded products offering like <unk>, which we launched in late fiscal 'twenty five as well as our strategies to drive higher quality cohorts through lower incentive promotions.

Roslane Aouameur: This was also the result of our expanded product offering, like heat and meat, which we launched in late fiscal 2025, as well as our strategy to drive higher quality cohorts through lower incentive promotions. Overall, our lifetime value curves have moved up as lower incentives bring in better customers and, compounded with higher basket sizes, have improved the economics per customer. We'll now turn to slide five to discuss margins and profitability. Gross profit came in at CAD 10 million in the fourth quarter, with gross margin at 40.3% for the quarter, up 220 basis points from last year. The margin improvement was mainly the result of reduced incentive promotions. Adjusted EBITDA was CAD 0.4 million for the fourth quarter, or 1.7% of sales, relatively flat compared to the CAD 0.5 million or 1.5% of sales last year, despite fixed costs being amortized on a lower order and sales basis.

Roslane Aouameur: This was also the result of our expanded product offering, like Heat & Eat, which we launched in late fiscal 2025, as well as our strategy to drive higher quality cohorts through lower incentive promotions. Overall, our lifetime value curves have moved up as lower incentives bring in better customers and, compounded with higher basket sizes, have improved the economics per customer. We'll now turn to slide 5 to discuss margins and profitability. Gross profit came in at CAD 10 million in the Q4, with gross margin at 14.3% for the quarter, up 220 basis points from last year. The margin improvement was mainly the result of reduced incentive promotions.

Our lifetime value curves have moved up as lower incentives has been getting better customers and compounded with higher basket sizes have improved the economics per customer.

I will now turn to slide five to discuss margins and profitability.

Gross profit came in at $10 million in the fourth quarter with gross margin at 43% for the quarter up 220 basis points from last year.

The margin improvement was mainly the result of reduced incentives promotions.

Adjusted EBITDA was EUR $44 million for the fourth quarter or one 7% of sales relatively flat compared to the $1 5 million or one 5% of sales last year, despite fixed cost being amortized on a lower order and sales basis.

Roslane Aouameur: Adjusted EBITDA was CAD 0.4 million for Q4, or 1.7% of sales, relatively flat compared to CAD 0.5 million or 1.5% of sales last year, despite fixed costs being amortized on a lower order and sales basis. Our consistent SG&A discipline helped stability or even minor improvements in margin. As Neil mentioned, this continued discipline in our efforts to bring flexibility to our cost structure have helped achieve this 11th consecutive quarter of positive Adjusted EBITDA. Moving now to slide 6. Cash flow from operations was a +CAD 0.3 million this quarter compared to -CAD 0.9 million last year. Adjusted free cash flow came in at CAD 1.7 million, a CAD 2.8 million improvement year-over-year, or CAD 1.5 million improvement over Q3.

Our consistent SG&A discipline helps the stability or even minor improvements in margin.

Roslane Aouameur: Our consistent SG&A discipline helped the stability or even minor improvement in margin. As Neil mentioned, this continued discipline in our efforts to bring flexibility to our cost structure has helped achieve this 11th consecutive quarter of positive adjusted EBITDA. Moving now to slide six, cash flow from operations was a positive CAD 0.3 million this quarter compared to negative CAD 0.9 million last year. Adjusted free cash flow came in at CAD 1.7 million, a CAD 2.8 million improvement year over year, or CAD 1.5 million improvement over Q3. Capital expenditures were CAD 0.2 million, largely related to maintenance and the kitchen relaunch at our Montreal facility. Overall, we generated positive adjusted free cash flow in six of the past eight quarters, reinforcing a more stable financial foundation even as we adjust to current market dynamics driving a lower customer base. Turning to slide seven, which summarizes our key financial metrics this year.

As Neil mentioned discontinued anticipated in our efforts to bring flexibility to our cost structure.

Got it.

Steve this 11th consecutive quarter of positive adjusted EBITDA.

Moving now to slide six cash flow from operations with a positive $3 million this quarter compared to negative $9 million last year.

That said free cash flow came in at $1 7 million.

A $2 $8 million improvement year over year, or one $5 million improvement over Q3.

Capital expenditures were $1 2 million.

Roslane Aouameur: Capital expenditures were CAD 0.2 million, largely related to maintenance and the kitchen relaunch at our Montreal facility. Overall, we generated positive adjusted free cash flow in 6 of the past 8 quarters, reinforcing a more stable financial foundation even as we adjust to current market dynamics driving a lower customer base. Turning to slide 7, which summarizes our key financial metrics this year. In fiscal 2025, we worked very hard to maintain and, in some instances, improve our profitability core metrics. In the face of sales declining 21%, we were able to bring in gross margin to 41.7%, a 50 basis point improvement compared to fiscal 2024, and Adjusted EBITDA margin to 5%, down only 90 basis points. Adjusted free cash flow to CAD 2.2 million, a second year with positive adjusted free cash flow.

Actually related to maintenance and the kitchen relaunch under Montreal facility.

Overall, we generated positive adjusted free cash flow and six of the past eight quarters, we enforcing a more stable financial foundation, even as we adjusted to current market dynamics driving lower customer base.

Turning to slide seven which summarizes our key financial metrics this year.

In fiscal 2025, we worked very hard to maintain and in some instances improve our profitability core metrics.

Roslane Aouameur: In fiscal 2025, we worked very hard to maintain and, in some instances, improve our profitability core metrics. In the face of sales declining 21%, we were able to bring in gross margin to 41.7%, a 50 basis point improvement compared to fiscal 2024, and adjusted EBITDA margin to 5%, down only 90 basis points, and adjusted free cash flow to CAD 2.2 million, a second year with positive adjusted free cash flow. The results cement our discipline in managing our cost structure, and the discipline our teams have displayed over the year. With that, I will now pass it back to Neil to walk through our outlook.

In the face of sale of declining 21% you were able to bring in gross margin to 41, 7%, a 50 basis point improvement compared to fiscal 'twenty, four and adjusted EBITDA margin to 5%.

Only 990 basis points and adjusted free cash flow to $2 2 million, our second year with positive adjusted free cash flow.

The result, cement our discipline in managing our cost structure.

Roslane Aouameur: The results cement our discipline in managing our cost structure and the discipline our teams have displayed over the year. With that, I will now pass it back to Neil to walk through our outlook.

The discipline of our teams have displayed over the year.

I will now pass it back to Neil to walk through or outlook.

Thank you Ross lets now turn to slide eight.

Neil Cuggy: Thank you, Ross. Let's now turn to slide 8. Fiscal 2025 had its fair share of obstacles. As we look forward, we can expect a meaningful evolution of the company in the coming months, quarters, and years. In August, we welcomed our new Chairman, Selim Bassoul, and began an operational review focused on product evolution, customer experience, and acquisitions. While the review remains ongoing, its conclusions will focus on ensuring the Goodfood meal solutions, both meal kits and Heat & Eat meals, provide customers with the experience and value that stabilizes the top line and brings delicious excitement to our members. Our digital platform also needs to provide the flexibility that enables customers to order our product with limited friction. Beyond Goodfood's meal solutions, we will also focus on acquisitions to leverage the platform Goodfood built over the past 11 years.

Neil Cuggy: Thank you, Roslane. Let's now turn to slide eight. Fiscal 2025 had its fair share of obstacles. As we look forward, we can expect a meaningful evolution of the company in the coming months, quarters, and years. In August, we welcomed our new chairman, Célinne Basoule, and began an operational review focused on product evolution, customer experience, and acquisitions. While the review remains ongoing, its conclusions will focus on ensuring the Goodfood meal solutions, both meal kits and heat and meat meals, provide customers with the experience and value that stabilizes the top line and brings delicious excitement to our members. Our digital platform also needs to provide the flexibility that enables customers to order our product with limited friction. Beyond Goodfood meal solutions, we will also focus on acquisitions to leverage the platform Goodfood built over the past 11 years.

Fiscal 'twenty five had its fair share of obstacles as we look forward, we can expect a meaningful evolution of the company in the coming months quarters and years and.

In August we welcomed our new chairman still in Brazil, and became an operational review focused on product evolution customer experience and acquisitions.

While the review remains ongoing its conclusions will focus on ensuring the good food meal solutions.

Okay, and heat and eat meals provided customers with the experience and value that stabilizes the topline and brings delicious excitement through our numbers.

Our digital platform also needs to provide the flexibility that enables customers to order our product with limited friction.

Yeah.

Feeling good food meal solutions, we will also focus on acquisitions to leverage the platform. We've built over the past 11 years.

Hi, gentlemen.

Rate case study.

Can build a portfolio of businesses that can benefit from the expertise and infrastructure built over the years.

Neil Cuggy: With Genuine Tea as a great case study, we can build a portfolio of businesses that can benefit from the expertise and infrastructure built over the years. This will require continued discipline and prudence in deploying limited capital. In the near term, we do expect to maintain cost structure resilience as we continue to see demand challenges in the meal kit market. This trend is affecting Goodfood and is also present across the competitors around the world. Heat & Eat is progressing well and nearing CAD 4 million of annualized sales, Genuine Tea is continuing to grow profitably, helping partially offset meal kit performance. In closing, we have strong belief that we can maintain capital allocation and cost structure discipline to build shareholder value through internal initiatives like the encouraging Heat & Eat launch and external initiatives like the Genuine Tea acquisition.

Neil Cuggy: With Genuine Tea as a great case study, we can build a portfolio of businesses that can benefit from the expertise and infrastructure built over the years. This will require continued discipline and prudence in deploying limited capital. In the near term, we do expect to maintain cost structure resilience as we continue to see demand challenges in the meal kit market. This trend is affecting Goodfood and is also present across the competitors around the world. Heat and meat is progressing well and nearing CAD 4 million of annualized sales, and Genuine Tea has continued to grow profitably, helping partially offset meal kit performance. In closing, we have a strong belief that we can maintain capital allocation and cost structure discipline to build shareholder value through internal initiatives like the encouraging heat and meat launch, and external initiatives like the Genuine Tea acquisition.

This will require a continued disciplined and prudent in deploying limited capital.

In the near term, we do expect to maintain cost structure resilience as we continue to see demand challenges in the meal kit market. This trend is affecting good food and is also present across the competitors around the world.

Keep meat is progressing well and nearly $4 million of annualized sales and genuine team is continuing to grow profitably, helping partially offset.

Performance.

In closing we have a strong belief that we can maintain capital allocation and cost structure discipline to build shareholder value through internal initiatives like the encouraging launch and external initiatives like the genuine Tech acquisition.

With that I will now turn it over to the operator for.

Neil Cuggy: With that, I will now turn it over to the operator for the Q&A.

Neil Cuggy: With that, I will now turn it over to the operator for the Q&A.

For the Q&A.

Thank you we will now begin the question and answer session to ask a question you May press star followed by the number one on your telephone keypad.

Operator: Your first question comes from Etienne Rocheleau with Desjardins. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star followed by the number two. One moment, please, for your first question. Your first question comes from Étienne Larochelle with Desjardins. Please go ahead.

Youre using a speakerphone please pick up your handset before pressing the keys.

My other question is Richard Star followed by the number to one moment. Please for your first question.

And your first question comes from Ashwin <unk> with <unk>. Please go ahead.

Hi, Good morning, Thank you for taking my questions.

Etienne Rocheleau: Hi. Good morning. Thank you for taking my questions. First off, in your comments on the operating review, you mentioned a focus on product evolution and a desire to refine your offering. I was wondering if you could please share an example or 2 on what type of changes you're looking to make on that front.

Étienne Larochelle: Hi, good morning. Thank you for taking my questions. First off, in your comments on the operating review, you mentioned a focus on product evolution and a desire to refine your offering. I was wondering if you could please share an example or two on what type of changes you're looking to make on that front.

First off in your comments on the operating review you mentioned the focus on productive elution and their desire through.

Youre, referring I was wondering if you could please share an example, or two on what those changes are listening to me on that front.

Hi, Thanks for the for the question.

Neil Cuggy: Hi, hi Etienne Rocheleau, thanks for the question. Like we said, I think it's still early days. Selim Bassoul has been in the business for about just under 90 days, I believe, and has spent a lot of time with the management team and myself, starting to really understand the levers that the business has, while the kind of macro landscape and competitor headwinds still exist. I think, you know, at a high level, it continues to be lean into Heat & Eat, focus on convenience and try to deliver as much value as possible. Things that our team has been executing well over the past couple of years and many quarters. High level it would be around that.

Like we said I think it's still early days like Slim has been in the business for both.

Neil Cuggy: Hi, I said thanks for the question. Like we said, I think it's still early days. Célinne has been in the business for just under 90 days, I believe, and has spent a lot of time with the management team and myself, starting to really understand the levers that the business has while the kind of macro landscape and competitor headwinds still exist. I think at a high level, it continues to be lean into heat and meat, focus on convenience, and try to deliver as much value as possible. Things that our team has been executing well over the past couple of years and many quarters. High level, it would be around that, and then we'll disclose more as we come through the next earnings calls.

Just under 90 days I believe and I have spent a lot of time with the management team and myself.

Starting to really understand the levers of the business.

While the kind of macro landscape and competitor headwinds still exist.

I think at a high level to continue to be lean and said he needs to focus on convenience and try to deliver as much value as possible. So things that our team has done.

Executing well over the past couple of.

Of years in many many quarters.

So high level it would be around that and then.

Disclose more as we come through the next earnings call.

Neil Cuggy: We'll disclose more as we come through the next earnings calls.

Okay got it thank you.

Also you mentioned that tuck in M&A like generally to something Youre still interested in going forward.

Etienne Rocheleau: Okay. Got it. Thank you. Also you mentioned that select M&A like Genuine Tea is something you're still interested in going forward. Can you please share an update on how the M&A pipeline looking right now and perhaps just give us a reminder on what type and size of targets you're looking at?

Étienne Larochelle: Okay, got it. Thank you. You mentioned that stock M&A like Genuine Tea is something you're still interested in going forward. Could you maybe share an update on how the M&A pipeline is looking right now, and perhaps just give us a reminder on what type of and size of targets you're looking at?

Sure.

The M&A pipeline looking right now and perhaps just give US a reminder, on what type of.

And what type of side of the story.

Target sort of account.

Yeah. Thanks again.

I think the pipeline is healthy.

Roslane Aouameur: Yeah. Thanks, Etienne Rocheleau. I think the pipeline is healthy. I think of the size we're looking at, which you can, you know, be around, Genuine Tea was around CAD 5 million sales. We're probably looking slightly higher up in the sales category, so call it 10 plus. I think the pipeline is healthy, but the deals do take time in the sense that the businesses tend to be smaller, sometimes a little less structured from an information perspective. I think, you know, we've had LOIs and diligence. It doesn't always convert. I think we're continuing to not only explore, but advance some specific situations. We have targets on what we're looking for.

Roslane Aouameur: Yeah, thanks, Étienne. I think that the pipeline is healthy. I think of the size we're looking at, which can be around Genuine Tea was around CAD 5 million sales. We're probably looking slightly higher up in the sales category, so call it 10 plus. I think the pipeline is healthy, but the deals do take time in the sense that the businesses tend to be smaller, sometimes a little less structured from an information perspective. I think we've had LOIs and diligence. It doesn't always convert, but I think we're continuing to not only explore, but advance some specific situations. We have targets on what we're looking for. The execution is sometimes a little longer at the size we're looking at.

And besides we're looking at which you can.

It'd be around genuine T was around the 5 million sales were probably looking at slightly higher up in the sales category. So call. It 10 plus.

I think the pipeline is healthy, but the deals do take do take time.

And necessity the businesses tend to be.

Smaller, sometimes a little less structured from an information perspective.

And then just I think Gail.

We've had.

LOI and diligence.

It doesn't always convert.

But I think we're continuing to not only absorb in advance some specific situations.

We have.

Based on what we're looking for it's.

The execution is sometimes.

Roslane Aouameur: The execution is sometimes a little longer at the sites we're looking at.

A little longer at this size you're looking at.

Okay.

Helpful. And then maybe the last one from me.

Etienne Rocheleau: Okay. That's helpful. Then maybe the last one from me. Active customers were down to 6,600 this quarter. I was wondering if you could maybe guide us on how active customers should track over the next two quarters. Do you have some sort of visibility on meal kit demand stabilization in North America in the near future, or is it still too early?

Étienne Larochelle: Okay, that's helpful. Maybe the last one from me. Active customers were down to 6,000 this quarter. I was wondering if you could maybe guide us on how active customers should track over the next two quarters. Do you have some sort of visibility on meal kit demand stabilization in North America in the near future, or is it still too early?

Customers were down to 6000 this quarter.

I was wondering if you can maybe guide us on how customers subtract over the next two quarters and you.

Do you have some sort of visibility on build to suit.

Then on stabilization in North America in the near future or is it still too early.

Yes, I think it's.

Yes.

Yes.

Roslane Aouameur: Yeah, I think the stabilization across North America isn't quite here yet. That said, I think Q4, as you know, has seasonality embedded in it. It is the summer months where people travel and spend more time outside than necessarily in their kitchen cooking. With that said, yeah, we're pretty realistic in seeing headwinds from a meal kit demand perspective. Hence, one of the pieces of the operating review being how do we bring the value and make sure that the customers see that, and what kind of meal solutions, what kind of convenience they're looking for, and then make sure to execute on delivering that. I think over the next few quarters, we are expecting the headwinds not to fully abate, but to definitely be near their peak. With that said, there are all structural challenges to the market that we're fighting through.

Roslane Aouameur: I think it's The stabilization across North America isn't quite here yet. That said, I think Q4, as you know, has seasonality embedded in it. It is the summer months where people travel and spend more time outside than necessarily in their kitchen cooking. With that said, yeah, we're pretty realistic in seeing headwinds from meal kit demand perspectives. One of the pieces of the operating review being how do we bring the value and make sure that the customers see that and what kind of meal solutions, what kind of convenience they're looking for, and then make sure to execute on delivering that.

Yeah.

Stabilization across North America isn't quite here yet.

That said I think in Q4 as you know.

As seasonality embedded in it as the summer months, where people travel and spend more time outside.

Early in their kitchen cooking.

With that said, yes, we're seeing we're pretty realistic and seeing headwinds from a demand perspective.

One of the pieces of the.

For the operating review being how do we bring the value in and make sure that the customers.

See that and what kind of meal solutions with tenant convenience are looking for and then.

Just execute on delivering that.

I think over the next few quarters, where we are expecting.

Roslane Aouameur: I think over the next few quarters, you know, we are expecting the headwinds not to fully abate, but to definitely be, you know, near their peak. With that said, you know, there are structural challenges to the market that we're fighting through.

We are expecting the headwinds not to fully abate, but to definitely be.

Near their peak with that sentence.

There are structural challenges to the market that we're fighting through it.

Maybe it's and if I can add to that I think the other thing Thats exciting right now is the.

Neil Cuggy: Maybe, Etienne Rocheleau, if I can add to that. I think the other thing that's exciting right now is the Heat & Eat portfolio. We're able to sell a separate subscription now. If you go to the website and try to sign up, you have our classic meal kit weekly subscription, and then you have also our Heat & Eat subscription. That's actually providing us two different sales options to customers. The Heat & Eat on subscription is growing quite well and makes up a small portion of the CAD 4 million annualized run rate, but a very fast-growing portion. We're able to kind of tackle that market.

Neil Cuggy: Maybe, Étienne, if I can add to that. I think the other thing that's exciting right now is the heat and meat portfolio. We're able to sell as a separate subscription now. If you go to the website and try to sign up, you have our classic meal kit weekly subscription, and then you also have our heat and meat subscription. That's actually providing us two different sales options to customers. The heat and meat on-sub subscription is growing quite well and makes up a small portion of the CAD 4 million annualized run rate, but a very fast-growing portion. We're able to kind of tackle that market. As we said in the prepared remarks as well, we have been very, very focused on acquiring more profitable customers.

The heat in the portfolio, we're able to sell us a separate subscription now. So if you go to a website and try to sign up you have our classic meal Kit weekly subscription and then you have also or he needs subscription so that's actually.

Providing us two different sales options to customers and the he needs on sub subscription is growing quite well.

Makes up a small portion of the 4 million annualized run rate, but at a very fast growing portion.

And we're able to kind of tackle that market and then as we said as we said in the prepared remarks as well we have been very very focused on acquiring more profitable customers or our 12 months lifetime value of our 24 months lifetime value are up substantially over the past couple of years and are tracking really well on a quarter basis.

Neil Cuggy: As we said in the prepared remarks as well, we have been very, very focused on acquiring more profitable customers. Our 12-month lifetime value, our 24-month lifetime value are up substantially over the past couple of years and are tracking really well on a quarter basis.

Neil Cuggy: Our 12-month lifetime value or 24-month lifetime value are up substantially over the past couple of years and are tracking really well on a quarter basis.

Okay.

Good color. Thank you for your comments, that's all I had.

Etienne Rocheleau: Okay. That's, that's good color. Thank you for your comments. That's all I had.

Étienne Larochelle: Okay, that's good color. Thank you for your comments. That's all I have.

Thank you Sir.

And I'm showing no further questions at this time I would like to turn it back to Neil Kogan for closing remarks.

Roslane Aouameur: Thank you, Etienne.

Roslane Aouameur: Thanks, Etienne.

Operator: I'm showing no further questions at this time. I would like to turn it back to Neil Cuggy for closing remarks.

Operator: I'm hearing no further questions at this time. I would like to turn it back to Neil Cuggy for closing remarks.

Mexico alone. Thank you for joining us on this call. We look forward to speaking with you again in the near future on our next call have a great day.

Neil Cuggy: Merci tout le monde. Thank you for joining us on this call. We look forward to speaking with you again in the near future on our next call. Have a great day.

Neil Cuggy: Merci tout le monde. Thank you for joining us on this call. We look forward to speaking with you again in the near future on our next call. Have a great day.

Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you all for joining you may now disconnect.

Operator: Thank you, presenters, and ladies and gentlemen. This concludes today's conference call. Thank you all for joining. You may now disconnect.

Operator: Thank you, presenters, and ladies and gentlemen. This concludes today's conference call. Thank you all for joining. You may now disconnect.

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